UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 3
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| QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2002
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| TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number 000-18962
CYGNUS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware |
| 94-2978092 |
(State or other jurisdiction of |
| (I.R.S. Employer |
Incorporation or Organization) |
| Identification Number) |
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400 Penobscot Drive, |
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Redwood City, California |
| 94603-4719 |
(Address of principal executive offices) |
| (Zip Code) |
(650) 369-4300
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
At September 30, 2002, there were 38,478,671 shares of the Registrant’s common stock was outstanding.
EXPLANATORY NOTE
This Amendment No. 3 to the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2002 is being filed solely to amend Exhibit 10.303. The exhibit, originally filed on November 13, 2002 and as amended February 20, 2003, omitted certain information with respect to which the Registrant was seeking confidential treatment. The Registrant amended its confidential treatment request on April 18, 2003 and the amended exhibit reflects such amended confidential treatment request. No revisions have been made to the Registrant’s financial statements or any other disclosure contained in such Quarterly Report.
PART II. OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K
a) Exhibits
The following exhibits are filed herewith or incorporated by reference:
3.01 Bylaws of the Registrant, as amended to date, incorporated by reference to Exhibit 3.01 of the Registrant’s Form 10-Q for the quarter ended June 30, 2002.
3.02 Restated Certificate of Incorporation of the Registrant, as amended to date, incorporated by reference to Exhibit 3.02 of the Registrant’s Form 10-Q for the quarter ended June 30, 2002.
4.01 Specimen of Common Stock Certificate of the Registrant, incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form S-1 (File No. 33 38363) filed on December 21, 1990 (Form S-1).
4.02 Form of Senior Indenture, incorporated by reference to Exhibit 4.1 filed with the Registrant’s Registration Statement on Form S-3/A (File No. 33-39275) filed on November 12, 1997 (November 1997 Form S-3/A).
4.03 Form of Subordinated Indenture, incorporated by reference to Exhibit 4.2 filed with the Registrant’s November 1997 Form S 3/A.
4.04 Form of Senior Debt Security, incorporated by reference to Exhibit 4.3 filed with the Registrant’s November 1997 Form S-3/A.
4.05 Form of Subordinated Debt Security, incorporated by reference to Exhibit 4.4 filed with the Registrant’s November 1997 Form S-3/A.
4.06 First Supplemental Indenture dated as of February 3, 1998 by and between the Registrant and State Street Bank and Trust Company of California, N.A., incorporated by reference to Exhibit 4.5 of the Registrant’s Form 8-K dated February 4, 1998.
4.07 Second Supplemental Indenture dated as of October 28, 1998 by and between the Registrant and State Street Bank and Trust Company of California, N.A., to the Indenture dated as of February 3, 1998 and the First Supplemental Indenture dated as of February 3, 1998, incorporated by reference to Exhibit 4.8 of the Registrant’s Form 8-K filed October 30, 1998.
4.08 Amended and Restated Rights Agreement dated October 27, 1998 by and between the Registrant and ChaseMellon Shareholder Services, LLC (the “Rights Agent” successor to Chemical Trust), which includes the Certificate of Determination for the Series A Junior Participating Preferred Stock as Exhibit A, the form of Rights Certificate as Exhibit B and the Summary of Rights to purchase Preferred Shares as Exhibit C, incorporated by reference to Exhibit 99.2 of the Registrant’s Form 8-A12B/A (File No. 0-18962) filed December 14, 1998.
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4.09 Registration Rights Agreement dated June 30, 1999 by and between the Registrant and Cripple Creek Securities, LLC, incorporated by reference to Exhibit 4.11 of the Registrant’s Form 10-Q for the quarter ended June 30, 1999.
4.10 Registration Rights Agreement dated June 29, 1999 by and between the Registrant and the listed Investors on Schedule I thereto, incorporated by reference to Exhibit 4.12 of the Registrant’s Form 10-Q for the quarter ended. June 30, 1999.
4.11 Registration Rights Agreement dated October 1, 2001 by and between Cygnus, Inc. and Cripple Creek Securities, LLC, incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form S-3 (File No. 333-71524) filed October 12, 2001.
10.115 First Amendment to Convertible Debenture and Warrant Purchase Agreement dated August 21, 2002 between the Registrant and the listed Investors described therein, incorporated by reference to Exhibit 99.2 of the Registrant’s Form 8-K filed August 23, 2002.
10.116 First Amendment to 8.5% Convertible Debentures Due June 29, 2004, incorporated by reference to Exhibit 99.3 of the Registrant’s Form 8-K filed August 23, 2002.
10.117 First Amendment to 8.5% Convertible Debentures Due September 29, 2004, incorporated by reference to Exhibit 99.4 of the Registrant’s Form 8-K filed August 23, 2002.
10.118 Second Amendment to 8.5% Convertible Debentures Due June 29, 2004, incorporated by reference to Exhibit 99.1 of the Registrant’s Form 8-K filed September 20, 2002.
10.119 Second Amendment to 8.5% Convertible Debentures Due September 29, 2004, incorporated by reference to Exhibit 99.2 of the Registrant’s Form 8-K filed September 20, 2002.
10.120 First Amendment to Structured Equity Line Flexible Financing Agreement dated March 23, 2001 between the Registrant and Cripple Creek Securities, LLC dated September 17, 2002, incorporated by reference to Exhibit 99.3 of the Registrant’s Form 8-K filed September 20, 2002.
10.121 First Amendment to Structured Equity Line Flexible Financing Agreement dated October 1, 2001 between the Registrant and Cripple Creek Securities, LLC dated September 17, 2002, incorporated by reference to Exhibit 99.4 of the Registrant’s Form 8-K filed September 20, 2002.
*10.211 Sales, Marketing and Distribution Agreement between the Registrant and Sankyo Pharma Inc. dated July 8, 2002, incorporated by reference to the Registrant's Form 10-Q/A filed on March 25, 2003.
*10.212 Mutual Termination of Warehouse Distribution Contract between the Registrant and UPS Supply Chain Management, Inc. (formerly Livingston Healthcare Services Inc.) dated September 10, 2002, incorporated by reference to exhibit 10.212 of the Registrant's Form 10-Q/A filed on February 20, 2003.
*10.213 First Amendment to the Mutual Termination of Warehouse Distribution Contract between the Registrant and UPS Supply Chain Management, Inc. (formerly Livingston Healthcare Services Inc.) dated September 26, 2002, incorporated by reference to Exhibit 10.213 of the Registrant's Form 10-Q/A filed on February 20, 2003.
*10.303 Second Amendment to the Exclusive License Agreement Dated January 31, 1995 for Device for Iontophoretic Non Invasive Sampling or Delivery of Substances between the Registrant and The Regents of the University of California dated September 19, 2002.
99.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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99.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
* Confidential treatment requested as to certain portions of this Exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission on April 18, 2003.
(b) Reports on Form 8-K:
The following Current Reports on Form 8-K were filed during the third quarter of 2002:
On July 10, 2002, we filed a Current Report on Form 8-K, reporting under Item 5 that Sankyo Pharma Inc. will make additional milestone payments of $15.0 million to Cygnus, Inc., bringing total milestone payments to $25.0 million, under our new U.S. sales, marketing and distribution agreement with Sankyo for the GlucoWatch Biographer in the United States.
On July 18, 2002, we filed a Current Report on Form 8-K, reporting under Item 5 the receipt of a milestone payment from Sankyo Pharma Inc. in the amount of $12.5 million.
On July 25, 2002, we filed a Current Report on Form 8-K, reporting under Item 5 the second quarter financial results.
On August 23, 2002, we filed a Current Report on Form 8-K, reporting under Item 5 the amendment of the Convertible Debenture Agreement and Convertible Debentures and, consequently, the cancellation of the previously announced plans to seek stockholder approval of a reverse stock split.
On August 29, 2002, we filed a Current Report on Form 8-K, reporting under Item 5 that the U.S. Food and Drug Administration (FDA) approved Cygnus’ supplemental pre-market approval (PMA) application for use of the GlucoWatch G2 Biographer by children and adolescents (ages 7 to 17).
On September 5, 2002, we filed a Current Report on Form 8-K, reporting under Item 5 that we received the final $2.5 million milestone payment from Sankyo Pharma Inc.
On September 18, 2002, we filed a Current Report on Form 8-K, reporting under Item 5 that the GlucoWatch G2 Biographer was now available via prescription to customers in the United States. Also, we announced that Sankyo Pharma Inc. had entered into an agreement with TheraCom, Inc. for the U.S. dispensing and patient insurance reimbursement services for the GlucoWatch G2 Biographer.
On September 20, 2002, we filed a Current Report on Form 8-K, reporting under Item 5 that the we and Cripple Creek Securities, LLC, signed an amendment to the March 2001 Equity Line Agreement and a substantially identical amendment to the October 2001 Equity Line Agreement. We also announced that we and our convertible debenture holders signed a second amendment to the original Convertible Debentures to amend the anti-dilution adjustment provisions in light of the new conversion price structure set forth in the first amendments to the Convertible Debentures dated August 21, 2002.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| CYGNUS, INC. | |
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Date: April 21, 2003 |
| By: | /s/ John C Hodgman |
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| John C Hodgman |
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| Chairman, President and Chief Executive Officer |
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| (Principal Executive Officer) |
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Date: April 21, 2003 |
| By: | /s/ Craig W. Carlson |
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| Craig W. Carlson |
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| Chief Operating Officer and Chief Financial Officer |
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| (Principal Accounting Officer) |
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CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECURITIES EXCHANGE ACT RULES 13a-14 AND 15d-14,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, John C Hodgman, certify that:
1. I have reviewed this quarterly report on Form 10-Q/A of Cygnus, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information related to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: April 21, 2003
/s/ John C Hodgman |
John C Hodgman |
Chief Executive Officer |
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CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECURITIES EXCHANGE ACT RULES 13a-14 AND 15d-14,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Craig W. Carlson, certify that:
1. I have reviewed this quarterly report on Form 10-Q/A of Cygnus, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information related to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: April 21, 2003
/s/ Craig W. Carlson |
Craig W. Carlson |
Chief Financial Officer |
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EXHIBIT INDEX
Exhibit |
| Description |
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*10.303 |
| Second Amendment to the Exclusive License Agreement Dated January 31, 1995 for Device for Iontophoretic Non Invasive Sampling or Delivery of Substances between the Registrant and The Regents of the University of California dated September 19, 2002. |
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99.1 |
| Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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99.2 |
| Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
* Confidential treatment requested as to certain portions of this Exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission on April 18, 2003.
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